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Economics (AS & A Level) · May / June 2026 · Paper 12 · Question 22

9708Fiscal policy

A government reduced direct taxes on consumers and businesses. What are likely to be the effects of these changes on consumption, investment and national output?

  1. Adecrease decrease decrease
  2. Bdecrease increase increase
  3. Cincrease decrease decrease
  4. Dincrease increase increase

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Correct answer: D. increase increase increase

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